Presidency challenges Atiku to explain cost of proposed petrol subsidy

THE Presidency has challenged former Vice-President Atiku Abubakar to disclose how he intends to finance his proposal to restore petrol subsidy if elected president in 2027.

Special Adviser to President Bola Tinubu on Information and Strategy, Mr Bayo Onanuga, said any return to subsidy would place additional pressure on government finances and could undermine the gains made since the policy was removed.

Atiku, the presidential candidate of the African Democratic Congress (ADC), had said on Wednesday that he would restore petrol subsidy if elected, arguing that the government had failed to account for savings from its removal.

Onanuga, however, described the proposal as a reversal of Atiku’s earlier position and questioned its fiscal sustainability.

READ ALSO: Tinubu: No regrets over subsidy removal, forex unification

He said the former vice-president had previously supported the removal of petrol subsidy ahead of the 2023 presidential election but was now proposing its return ahead of the 2027 poll.

According to Onanuga, restoring subsidy would take Nigeria back to a system associated with high fiscal costs, corruption and inefficiency.

He also rejected Atiku’s claim that the Federal Government had accumulated about N30 trillion in subsidy savings, saying there was no such windfall.

The presidential aide explained that under the former regime, the Nigerian National Petroleum Company Limited (NNPCL) absorbed the difference between the cost of petrol and the regulated pump price, creating a significant financial burden.

He said the Petroleum Industry Act had already provided a framework for ending the subsidy regime by June 2023, while Tinubu accelerated its implementation shortly after assuming office.

Onanuga further argued that developments in the domestic refining industry had changed the economics of the petrol market, particularly with thp emergence of the Dangote Refinery and other local refining capacity.

He warned that bringing back subsidy could weaken domestic refiners by making imported petrol artificially cheaper and could reverse progress towards local production.

The presidency said a return to subsidy would also have implications for public spending, as government would have to finance the difference between the economic cost of petrol and the price paid by consumers.

Onanuga estimated the economic cost of petrol at between N1,200 and N1,300 per litre, asking Atiku to explain who would bear the difference if the product were sold below that level.

He said the burden could ultimately translate into reduced allocations for infrastructure and social programmes, lower transfers to states and local governments, increased borrowing or higher public debt.

While acknowledging the hardship caused by higher fuel prices, Onanuga said the government favoured measures such as compressed natural gas initiatives to reduce transportation and energy costs rather than returning to subsidy.

READ ALSO: Atiku accuses Tinubu of paying petrol subsidy, spending N17.5trn on pipeline security in 1 year

He urged Atiku and other political contenders to provide clear fiscal and legal details if they intend to campaign on a subsidy restoration policy.

“Political promises must be backed by fiscal arithmetic,” Onanuga said, demanding clarity on the annual cost of the proposed subsidy, its funding source, potential borrowing requirements and whether existing petroleum laws would need to be amended.

He said Nigeria should avoid returning to policies whose costs eventually emerge through higher debt, weaker public spending and increased pressure on the naira.